“PartyGaming leads the Casino Industry on the London Stock Exchange”

American company PartyGaming is the latest casino empire to take advantage of the free and legalized status of internet gambling in Britain. Unlike America where each state has its own regulations concerning gambling, Britain's online gaming industry is fully legalized and offers incentives through an established gaming commission for gambling operators to bring their business to the country. Due to this welcoming climate, internet gambling is experiencing a strong period of growth in Britain with many companies due to be listed on the London Stock Exchange in the near future.

PartyGaming has set the lead in this respect, joining the Stock Exchange on June 27. At the time of its debut the price per share was $2.12, or 116 pence. By close of business on the following day, the share price had already risen by 11 percent to $2.35, or 129 pence. This brought PartyGaming's total value to nine billion dollars, close to rivaling competitor MGM Mirage and leaving contemporaries Wynn Resorts and Harrah's Entertainment trailing in its wake.

Richard Segal, chief of PartyGaming, predicts further growth for the company. Its intentions to concentrate on bingo and casino operations while targeting the Asian and European markets have given rise to predictions of further strong performances on the London Stock Exchange.

The current share price has recently encouraged sales from three of PartyGaming's founding members. Anurag Dikshit, the Group Operations Officer, has reportedly sold shares worth 720 million dollars. PartyGaming's creator Ruth Parasol and her husband J. Russi DeLeon have also sold shares separately at a value of $370 million dollars. While these sales are substantial, all three individuals will retain stakes in the company's future.

Information on the sales remains a closely guarded secret. Large American-based funds Vanguard, Putnam and Fidelity have neither confirmed nor denied their involvement. However American fund managers are known to have participated in the deal due to PartyGaming's public offering being over subscribed at a ratio of 3:1. Their reluctance to make public statements concerning the PartyGaming sales is thought to be related to the ambiguous legislation surrounding internet gambling in many parts of the United States. A PartyGaming publicity officer, Ed Bridges, confirmed that shares had been sold to international investors but refused to specify which funds or countries had participated in the sale.

The difference in legislation between Britain and the United States could also prove uncomfortable for American fund managers used to operating in Britain. The temptation to invest in companies listed on the FSTE 100 index – such as PartyGaming, expected to join in September – could result in some American funds investing in business deemed illegal in the United States.

Regardless of its performance, PartyGaming's entry onto the London Stock Exchange will remain an interesting case to follow due to the political and legislative ramifications it poses.